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Select Committee on Economic Affairs

Select Committee on Economic Affairs

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Select Committee of Economic Affairs (House of Lords) made on the Economic Impact of Immigration. It argues the benefits are null or negative & strongly criticises Government's representation of the matter & the non-existent statistical recording of immigration, emigration & immigrant employment.
Select Committee of Economic Affairs (House of Lords) made on the Economic Impact of Immigration. It argues the benefits are null or negative & strongly criticises Government's representation of the matter & the non-existent statistical recording of immigration, emigration & immigrant employment.

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16. Under the principal variant of the most recent (2006-based) population
projections of the Government Actuary’s Department (GAD), the UK
population is expected to grow from 60.6 million in 2006, to 71 million in
2031 and 85 million in 2081 (Table 3 and Appendix 7 show the latest
projections). That is equivalent to an annual growth rate of 0.6% during the
period 2006–2031, which is faster than the 0.5% per year growth
experienced from 2001 to 2006. Just under half of the projected UK
population growth during the period 2006–2031 is from net immigration.
The remaining half is accounted for by natural increase—births in excess of
deaths—of which 31% would occur in the absence of immigration and 23%
arises from the positive effect of net immigration on natural change. GAD
thus concludes that, in total, 69% of the UK’s population growth during
2006–2031 in the principal projection is attributable, directly or indirectly, to
future net-migration.13
17. In the long term, all of the projected growth in the UK population is
attributable to net immigration. If there was no migration (that is, zero
immigration and zero emigration), the projected population in 2081 would
be 3.3 million lower than in 2006. Professor Robert Rowthorn of Cambridge
University calculated that, with zero net immigration or “balanced
migration” (i.e. when immigration equals emigration), the population would
be 3.7 million higher by 2081 (p 27). Balanced migration increases
population growth because immigrants are, on average, younger than
emigrants and are thus more likely to have children (p 2).

TABLE 3
Projected changes in UK population, 2006–2081 (millions)

Population projections

Assumed net
immigration

2006 2031 2056 2081

High Migration

0.250

60.6

73

82.8 91.9

Principal Projection

0.190

60.6 71.1 78.6 85.3

Low Migration

0.130

60.6 69.2 74.3 78.6

Balanced Migration

0

60.6 65.1 65.2 64.3

No migration (natural
change only)

0

60.6 63.8 61.5 57.3

Source: Government Actuary’s Department (GAD 2007), 2006-based projection database; except for “balanced
migration” which is taken from written evidence by Robert Rowthorn (p 27).

18. Projecting future population growth depends critically on the underlying
assumptions about future natural change (births minus deaths) and future
net immigration. The estimates for future net immigration are projections
based on past trends rather than results of forecasting models. Consequently,
GAD’s projections of net immigration, natural change and population
growth involve a high degree of uncertainty. GAD’s assumptions about
future long-term net immigration changed three times over the past five years

13 GAD, Migration and Population Growth,
http://www.gad.gov.uk/Demography_Data/Population/2006/methodology/mignote.asp

14

THE ECONOMIC IMPACT OF IMMIGRATION

(130,000 per year in 2003-based projections; 145,000 in 2004-based;
190,000 in 2006-based).
19. Net immigration is extremely difficult to predict because of the complexity
and variability of its determinants. The scale and patterns of immigration are
determined by a range of economic, social and political factors. These
include differences in economic conditions (e.g. wages and unemployment)
and life satisfaction between the UK and other countries; employer demand
for immigrant labour in the UK; national and international recruitment
agencies that help connect employers in the UK with immigrants abroad
and/or already in the UK; immigrant networks (immigrants’ contacts with
family and friends abroad and in the UK); and government policy in the UK
and other immigration countries. The increase in immigration since the late
1990s was significantly influenced by the Government’s Managed Migration
policies. These encouraged labour immigration through, first, an expansion
of the work permit system (the annual number of work permits issued to
non-EEA nationals increased from fewer than 30,000 in the mid 1990s to an
annual average of over 80,000 in the early 2000s),14

and then the decision to
grant nationals of the A8 countries immediate free access to the British
labour market when their countries joined the European Union in May 2004
(over 750,000 A8 nationals registered for employment in the UK during May
2004–December 2007).15

The much larger then expected immigration of A8
workers since May 2004 is a good example of the difficulties in predicting
and measuring migration flows and migrant stocks in the UK (see Appendix 9).
20. The development of future immigration, including from Eastern Europe, is
uncertain. On the one hand, net immigration may decline due to a slowdown
in the British economy, economic growth in the A8 countries and the
opening up to A8 workers of other EU countries’ labour markets, most
notably Germany and Austria, in the coming years. Professor Rowthorn told
us that the experience of Irish immigrants into the UK showed that if the
economy of the sending country “develops dramatically then emigration
flows dry up—in fact they may go into reverse” (Q 12). He added that A8
immigration “might take 10 or 15 years to tail off but my guess is that the net
flows will tail off and probably … faster than people think” (Q 32).
21. On the other hand, we received evidence from Professor David Blanchflower,
an external members of the Monetary Policy Committee (MPC), and from
the Institute of Directors, that the experience of other countries has shown
that immigrant networks may perpetuate immigration even when the
economic factors that triggered immigration in the first place, such as large
differences in the standard of living between migrant sending and receiving
countries, decline16

(Blanchflower p 197–198). Referring to immigration in
general, rather than immigration from Eastern Europe in particular,
Mr Martin Wolf of the Financial Times said he “would be extremely
surprised if the demand from immigrants to come into this country … did
not remain pretty strong”. This was based on the “extraordinarily large”
number of people gaining an education throughout the world and the fact
that Britain is an attractive destination due to its relatively high income and
the fact that it speaks English (Q 399). Dr Bridget Anderson also emphasized

14 See Appendix 11.

15 Home Office 2008, Accession Monitoring Report May 2004–December 2007

16 Institute of Directors, Immigration: a business perspective (January 2007), p 12

THE ECONOMIC IMPACT OF IMMIGRATION

15

the importance of learning English and to “have fun” as a key factor that
motivates young East Europeans to migrate to the UK (Q 213).

Key features of recent migration to the UK

22. Immigration to the UK has been highly concentrated in London while the
rest of the South East, as well as Yorkshire and Humber, have also attracted
large shares relative to the rest of the country. Recent immigration, however,
has been more widely distributed across the UK with a still substantial but
much smaller proportion of net immigration in London. As shown in Table
4, the areas mentioned above accounted for almost three quarters of
international net immigration to the UK during the period 1991–2006 but
just under 60% of net immigration in 2004–2006. London has seen the
biggest change with more than half of net immigration in 1991–2006 and
36% in 2004–06. The recent change has been mainly due to the arrival of
Eastern European migrants who have been much more widely distributed
across the UK than other migrant groups. Between May 2004 and December
2007, Anglia had the greatest number of A8 workers registering with
employers in the area (15% of the total), followed by the Midlands (13%)
and London (12%).17

TABLE 4
Total international net immigration by region, 1991–2006

1991–2006

2004–2006

Thousands

%

Thousands

%

England

+1,854

99.7%

+598

93.6%

London

+989

53.2%

+230

36.0%

South East

+200

10.8%

+64

10.0%

Yorkshire and Humber

+182

9.8%

+80

12.5%

Rest of England

+483

26.0%

+224

35.1%

Wales

+27

1.5%

+7

1.1%

Scotland

–2

–0.1%

+26

4.1%

Total UK*

+1,860

100.0%

+639

100%

International net immigration refers to all net immigration from outside the UK (including that of British nationals)
*Figures for Northern Ireland are currently being revised. They are included in the total for the UK but not reported
separately.
Source: ONS, Total International Migration (TIM) tables, 1991-2006

23. Between 1995 and 2006, two-thirds of the growth in the foreign-born
population of working age was of people born in Africa and Asia (see Table
2). In the last few years there has been a large additional net inflow from the
EU, which accounted for just under a third of all net immigration in 2004–
06, including 19% from the A8 countries. Figure 2 shows the changes in the
pattern of net immigration since the early 1990s.

17 Home Office 2008, Accession Monitoring Report, May 2004–December 2007, p. 17

16

THE ECONOMIC IMPACT OF IMMIGRATION

FIGURE 2
Scale and composition of foreign net immigration to the UK by nationality,
1991–2006 (thousands and %)

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

1991-1995 1996-2000 2001-2003 2004-2006

Other

New CW

Old CW

A8

EU15

+155

+193

+30

+40

+348

+244

+107

+93

+367

+230

+74

+29

+263

+331

+85

+181

+95

EU15: the fifteen EU member states before EU enlargement in 2004
A8: the eight East European countries that joined the EU in 2004
Old Commonwealth (Old CW): Canada, Australia, New Zealand and South Africa
New Commonwealth (New CW): all other Commonwealth countries
Source: ONS, Total International Migration (TIM) tables, 1991-2006

24. The economic impact of immigration depends partly on immigrants’ length
of stay in the UK. Among new immigrants in 2005, 44% said they intended
to stay for 1–2 years (up from 35% in 1996), followed by 19% who said they
intended to stay for 3–4 years, and 30% more than 4 years (down from 39%
in 1996).18

Among A8 workers registering for employment in the 12 months
to September 2007, 62% said they intended to stay for less than one year
(including 57% saying that they would stay for less than three months).19

As
intentions may change, these data cannot be considered reliable indicators of
immigrants’ likely degree of permanency and length of stay in the UK.
Recent research on Eastern Europeans suggests that, over time, a significant
share of immigrants change their intentions from a short-term to a longer-
term or permanent stay in the UK.20

Another recent paper found significant
variation in return propensities across immigrants from different origin
countries and of different ethnicity.21

Return migration is significant for
immigrants from the EU, the Americas and Australia and New Zealand. In
contrast, it is much less pronounced for immigrants from the Indian sub-
continent and from Africa.

18 ONS 2007, International Migration, Series MN no.32, Table 2.11, p.17

19 Home Office 2008, Accession Monitoring Report, May 2004–September 2007, p. 16

20 Spencer, S., Ruhs, M., Anderson, B. and Rogaly B. (May 2007), Migrants’ lives beyond the workplace: The
experiences of East and Central Europeans in the UK, Joseph Rowntree Foundation, London
21 Dustmann, C. And Y. Weiss (2007), Return Migration: Theory and Empirical Evidence from the UK, British
Journal of Industrial relations 45(2): 236–256

THE ECONOMIC IMPACT OF IMMIGRATION

17

25. Intentions of stay are related to immigrants’ reasons for coming to the UK,
which are, in turn, often—but not always—reflected in immigrants’
immigration status when entering the UK. The ONS provides data on
annual immigration by purpose of visit for all persons (including British
citizens) who intend to stay for more than 12 months, while the Home Office
publishes data on the immigration status of all non-EEA nationals (including
those staying for less than 12 months) arriving in the UK. Although both sets
of data are incomplete and not always consistent, broad patterns can be
identified. In recent years, the main reason for immigration (including that of
British nationals) has been work (39% in 2006, one of the highest shares
among major OECD countries),22

followed by study (27%) and
accompanying/joining family members/partners. Compared to the early
1990s, the shares of work-related immigration and immigration for studying
in the UK have each increased by about 10%, while the share of family
immigration and immigration for other reasons declined (see Figure 3).

FIGURE 3
All immigration (incl. British nationals) by reason of visit, 1991–2006

29.3%

34.6%

37.6%

39.1%

27.0%

19.4%

15.6%

17.6%

16.9%

20.3%

23.9%

26.6%

16.9%

19.6%

17.5%

9.5%

10.1%

6.1%

5.5%

7.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1991-1994

1996-2000

2001-2005

2006

No reason stated

Other

Formal study

Accompany/join

Definite job or
looking for work

Source: ONS, Total International Migration (TIM) tables, 1991-2006

26. Among non-EEA nationals, whose immigration the UK can control, Home
Office data suggest that students have been the biggest group in recent years
(309,000 in 2006), followed by work-related migrants (about 167,000) and
family members/dependants (about 118,000).23
27. The existing data about emigration from the UK, based on the International
Passenger Survey, do not contain any information about the leaving person’s
legal (immigration) status in the UK. So it is impossible to describe the
composition of the current immigrant population in the UK by its
immigration status. Professor David Coleman of Oxford University
explained: “The International Passenger Survey … was invented back in the

22 OECD (2007), International Migration Outlook 2006

23 Home Office, Control of Immigration Statistics 2006, Table 2.2, p.33

18

THE ECONOMIC IMPACT OF IMMIGRATION

1960s as an instrument for the Board of Trade for balance of trade, tourism
and things of that kind. It is only incidentally used to measure migration. It
does so by using a small fraction of its interviews … to take a voluntary
sample of those coming in, about 1,800 a year, and those going out, about
800 a year or thereabouts. Those are then grossed up to make migration
assumptions from different categories of people by age, marital status,
country of origin, nationality and all the rest of it. That is intrinsically
unsatisfactory because it is voluntary and it is quite a small sample survey”
(Q 268).
28. Immigration status is important to the analysis of the economic impacts of
immigration because it determines an immigrant’s rights in the UK,
including rights in the labour market, access to welfare benefits and rights to
family-reunion, and rights to stay permanently in the UK and acquire British
citizenship. As shown in Appendix 8, different types of immigration status
are associated with different rights and restrictions. For example, unless they
are highly skilled, immigrants holding work permits may only work for the
employer specified on the permit. In contrast, EEA nationals and non-EEA
nationals with permanent residence status in the UK have complete freedom
of employment in the UK. Immigrants employed on low-skilled work permits
do not have rights to family reunion, but those on skilled and highly skilled
permits do. Access to welfare benefits, such as jobseekers’ allowance, varies
across different types of status.

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